re: A clearer picture regarding LSU and the rumors around private equity is emerging

LSU went on binge and fired:

Scott Woodward: $6 million buyout
Matt McMahon: $8 million dollar buyout
Brian Kelly: $54 million buyout.

And kept it going hiring:

Lane Kiffin: $91 million ($72 million guaranteed; $13 million this season)
Will Wade: $30 million ($22.5 million guaranteed; $4 million this season)

NIL for football and basketball this season: $42-50 million

Profit sharing: $20 million

6+8+54+13+4+42+20 = 147

This year’s LSU buyouts, salaries, NIL, profit sharing: $147 million.

That doesn’t even include the cost of assistant coaches.

And that’s just for football and basketball. And probably $10 million too conservative. There is still baseball, women’s basketball, gymnastics, softball… on and on. More expenses.

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They need the $100 mil up front. If it was just about investing and getting returns, they would invest the media payout themselves into a basic SP500 fund (which has out returned the average PE Fund over the last year, 5 years, 10 years, and 20 years). They just need the up front cash

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Yeah, that’s what you’d do and lose your a$$ more times than win. Look up present value of a future cash flow

We haven’t even gotten into the long-term implications of transferring media rights into a private entity that can be sold off.

This structure is essentially what FIFA proposed doing (right after the WC ended last month) that everyone immediately denounced.

Even if it’s just this 9% that’s sold, you’ve introduced a lot of unknown variables:
• there’s now an outside influence at the negotiating table alongside other schools’ at the next round of media negotiations, that at the least can create friction when attempting to get LSU to agree to proposals
• A critical point of a sale of the entity’s equity, in addition to the 7% profits interest distribution—to be clear they can be completely de-linked—is a repurchase obligation for this new entity to buy out Williams after [x] years (or, less likely, a re-sale privilege). This is a mechanism to ensure Williams has another pathway to earn his cost of capital, and can create major, major headaches between parties down the road. Like, usually results in litigation to force agreeable settlement terms. So LSU is signing itself up for years of friction with this new structure
• once you’ve divested the asset from the university, the strategy how to preserve and grow that asset can get completely divorced form the productive larger mission. New licensing agreements for LSU’s media properties, increased efforts to advertise and market LSU to create supplemental revenue streams, and sales of media, among other ideas, all create conflicts for potentially raising ownership and privacy concerns from those shown in the content, and media ownership disputes
• the sheer existence of an entity that could now be a place for LSU to sell future valuable assets to in related party deals (it’s much easier once those channels are established), are all really significant concerns that this structure is opening LSU to be exposed to / suffer down the road.

This is a complete Pandora’s box of issues how you ruin a once-proud, once-valuable, civic asset.